At the start of the week, I would have put his chances of surviving at 80/20. Now they would be closer to 50/50.

I still have money on him seeing out 2013, as I don’t think they want to risk Cunliffe as Leader. However if those wanting a change do a Rudd type destabilisation, it may force the caucus to act.

The coverage of the whole “man-ban” issue has exposed the party’s fundamental flaws: its factions, the tensions between the caucus and the party, and the perception that the party is overly concerned with issues of identity.

Amid the leadership issues, there has been a serious debate internally in Labour this week about the wisdom of Maryan Street promoting her euthanasia private members’ bill.

Labour is terrified it will be drawn out of the ballot.

I hope it does. This law reform is badly needed and overdue.

Would the party go with the candidate that could get them closest to Government but risk further disunity in the party, Cunliffe?

Or would it risk going with the lower profile deputy, someone less likely to get them into the Government, someone with less public appeal (nothing to do with him being gay) but more likely to unify the party?

This is the Robertson dilemma. He might be ready but is the public?

Don’t rule out Little!

But replacing Shearer with either Cunliffe or Robertson would be as risky as the move was to put in Shearer.

In the event of failure, the party could be forced to contemplate a second leadership contest closer to the 2014 election with a wild card such as Shane Jones, Little or even back to Goff as leader were Robertson or Cunliffe unable to steer the party away from a disastrous result akin to Bill English’s in 2002 of just over 20 per cent. None of these scenarios is out of the question.

If you are ever of a mind to stage a coup against your party leader – or your boss, or even your mother – there are two golden rules you must follow.

1: Deny you’re planning a coup

2: See rule one

So true.

I thought it might be useful for readers who have had less experience with covering coups than Garner – or myself – to set out again a few basic rules of coup plotting.

The idea is to destablise the leader first, to soften him or her up for the bloodletting to follow. This is normally done by having a word in the ear of a journalist you can trust not to dob you in.

You do this for a number of reasons. Going public makes the leader’s job more difficult. It probably leads to a further decline in the leader’s popularity with the public. And it sends a signal to your colleagues that a plot to roll the leader is under way.

What we don’t know is which of the many factions was behind it?

The third point is, as I emphasised above, that those involved will absolutely lie about it. Indeed, their dishonesty is expected and accepted by press gallery journalists. One of the first things I was told when I started in the gallery was that coup plots were the one time when MPs were expected to lie to journalists – and when it was considered acceptable for them to do so.

I am absolutely sure Labour MPs are plotting against Shearer. Why wouldn’t they be? It’s sheer self-preservation. Shearer’s personal popularity with the public is woeful. Most people have no idea who he is, and those who do know think he’s a shambolic, equivocal, spineless ditherer with the political nous of a first-term MP.

Shearer is a lovely man. I’d let him babysit my kids without hesitation. But to date he has revealed neither the fortitude nor the authority to lead a political party – let alone be a prime minister.

I doubt anyone would have ever said they’d let Rob Muldoon babysit their kids

What sealed it for me was when Shearer was asked why he didn’t put a stop to the “man ban” proposal when he first heard about it. He replied Labour was a democratic party, “and I can’t just bang my fist and get what I want”.

Excuse me? Why ever not? Does Shearer honestly believe Clark ran Labour as a democracy? Flat hierarchies may work fine in NGOs like the UN but party politics is feral. The leader of the pack needs to be, at best, a benevolent dictator.

Labour’s MPs know this. They are wringing their hands in despair. The window for rolling Shearer is open, but not for much longer. But when to leap, and into whose arms?

Those are the only questions keeping Shearer in his job.

I still think Shearer may hang in, because the large ABC faction can not risk Cunliffe winning a membership vote and becoming Leader. It would mean several long serving MPs would have to retire from Parliament – and they don’t want to.

If the caucus still elected the leader, the Shearer would probably be toast. But unless the factions can agree on a suitable alternative, and deputy, he may hang on.

Ed Miliband today achieved what might previously have seemed impossible. His Labour Party/union reform speech had Tony Blair gushing before it was even delivered – and it had the approval of Unite Union leader Len McCluskey immediately afterwards. …

But whatever the long-term impact of Miliband’s ideas, he achieved a tidy political set-piece today. This mattered for Ed because he is often written up as a man not ready for the job. In the middle of last week, some of his front-bench was briefing that he needed to “get a grip” on the union influence stories spilling forth from the initial problem in Falkirk. In a few days of practiced political management, Miliband does seem to have tightened – if not quite sewn up – this troublesome narrative, for the time being, at least.

You can look back on the past week and see a plan that was quickly put together and decisively executed. There was a resignation, suspensions and police referrals last week. A grim-faced Angela Eagle was deployed to tell a “get tough” story on Falkirk. This week, the lobby was briefed in advance of Miliband’s speech on some meaty reform details. Blair obliged with his warm endorsement on Sky News right ahead of the speech and Miliband sprung a genuine surprise with a voter-friendly proposal to restrict the amount MPs can earn outside of their day jobs. The analysts were so impressed by this last point that they said Miliband had hurled the ball cleverly in to the Tory half of the court for a response.

And this is how competent political management should look.

The contrast with David Shearer’s Labour leadership in New Zealand is incredibly stark. MPs in NZ are again whispering to journalists about Shearer’s leadership and playing dumb with their bosses when asked for an explanation (this is what I took to have happened with the Duncan Garner tweet drama last night, NZ time, for those who were following it). Whatever his colleagues say, it’s clear that Shearer does not have enough of the confidence of his own caucus. …

He seems too far gone as leader now.

The diverging prospects of the two Labour leaders over the past week are instructive. Neither man is as politically gifted as his centre-right adversary, but at least one of them is making some of his own luck.

To be fair to Shearer, he is not solely responsible. The Deputy Leader is meant to play a key role in party management, as are the staff.

Labour leader David Shearer is facing more destabilising rumours after batting off speculation all day that a letter of no confidence was being circulated among his MPs.

The rumour started circulating early in the day yesterday but the MPs named as being behind the move hotly denied it and Shearer said through a spokesman there had been no letter and the claims were rubbish.

Soundings among party insiders suggested there was no push on but the latest speculation will not help his leadership after earlier rumours of a leadership push before the end of the year.

The latest speculation followed a series of Labour crisis meetings over a so-called “man ban” in proposed changes to party selection rules which were withdrawn yesterday following a backlash from Labour’s MPs.

The rumours centred on a no confidence letter supposedly circulated by Labour MPs Clayton Cosgrove, Andrew Little and Shane Jones, but all three rubbished it.

Someone at The Standard said what they had heard was Little would stand for Leader with Jones as his deputy.

Cosgrove said the rumours had been started by National and told Fairfax the speculation was “absolute crap”.

He was 100 per cent behind Shearer’s leadership.

Little and Jones also flatly denied the letter.

Jones said he had seen no letter and no one had approached him to sign any letter.

Little is understood to have approached Shearer earlier to give him an assurance he had not been destabilising his leadership.

Insiders were saying there was no discussion about a no confidence motion during Monday’s caucus.

Reports from inside the David Cunliffe camp said he had contacted Shearer to assure him he was not behind any of the rumours and was not moving against him.

The old saying is it is never official until it is denied – as Kevin Rudd did. Rudd denied he would challenge right up until two hours before he did.

As I said last night, I don’t think there is currently a letter. However it is clear there is a destabilisation campaign underway. Just two weeks ago we heard a Labour MP telling both One News and Three News reporters that Shearer had 60 days.

An Auckland Labour source suggested the aim was to replace the current leadership with Wellington Central MP Grant Robertson, former party president Andrew Little and David Cunliffe in the finance role.

The unity ticket. The big losers would be Parker, and of course Shearer.

Rongotai MP Annette King also joined in the fight back accusing reporters of getting it wrong and running false rumours from Right Wing commentators.

As far as I know, no “right wing commentator” said anything about the rumour until Duncan Garner broadcast them.

Good source. Coup on in Labour. Letter of no confidence being circulated. It’s over for Shearer. Watch for his resignation.

If this is right, then a fascinating Robertson v Cunliffe battle for the leadership – unless they do a deal and one does Leader and one Deputy.

Or will Little stand also and try to be the candidate in the middle, who can appeal to both the left supporting Cunliffe and the ABC faction? If Robertson is seen as too tied up in the recent bad political management, Little could come through the middle.

@Garner_Live Your source is full of crap. No letter. No leadership challenge. Stop making things up.

Now I don’t believe Garner is making anything up. I have no doubt a source has told him that there is a letter of no confidence.

However it is possible Garner is being played by someone in Labour trying to destabilise Shearer. This was the Rudd vs Gillard strategy – keep the speculation alive, so the leader is so weakened that have to go.

Whether Garner’s source is correct or not will become apparent with time. Fascinating to watch.

UPDATE2: Duncan Garner has said on Radio Live that Patrick Gower has the letter, and will show it on Nightline tonight at 1030.

This makes me think that there is no coup letter (at this stage), but that someone in Labour has started a destabilisation campaign.

UPDATE4: Grant Robertson has tweeted he has contacted every Labour MP, and they all deny there is a letter. So I think nothing is happening for now. However, the fact someone in Labour is creating trouble is not good for them.

A the last election Labour got 34 MPs. 22 were male and 12 female. Under Labour’s proposed quota, the bottom five men on the list would have to have been placed below the next five women. So who would have been the lucky five women to have got in:

Carol Beaumont

Carmel Sepuloni

Deborah Mahuta-Coyle

Steve Chadwick

Kate Sutton

The next after that is Josie Pagani and Lynette Stewart.

More interesting is who are the five men who would have been dumped:

Raymond Huo

Rajen Prasad

Shane Jones

Andrew Little

Charles Chauvel

Next on the list to be dumped would be Clayton Cosgrove and David Parker!

This shows well the problems of quotas. You’d get gender equality, yet knock out a Maori, two Asians and a Pacific Islander which means less diversity in other areas. Diversity is important (well to me anyway), but you need to balance up many competing factors. A quota removes discretion and is a vote of no confidence in a party to be fair to women.

Labour leader David Shearer has come out against proposed party rule changes that would ensure half of all its MPs were women by 2017 and would allow “women-only” candidate selections in some seats.

The proposed rule changes, to be decided at the party’s annual conference in November, would force the party’s list selection committee to ensure women would make up 45 per cent of the party’s caucus in 2014 and 50 per cent by 2017.

However, Shearer said targets, not quotas, was a better way to go.

Absolutely, which is National’s position also.

However just because Shearer and some MPs are against, does not mean it will fail. Quite the contrary. The Party President is a strong supporter of it, and they have been agreed to by the party’s ruling NZ Council – which Shearer is on. Activists could well vote to humiliate Shearer by voting for them in November.

One has to wonder did Shearer vote against them at the NZ Council meeting? If so, then he must have got rolled. If not, he has flip-flopped. Either way a leader not in great control of his party.

Shearer’s concerns are the more immediate. An opinion poll last week delivering a dismal ranking for both the party and Shearer personally was devastating to Labour. With National halfway into a less than easy second term, Labour was hoping that by now it would be shaping up much better. Shearer is not helped by his backers saying that if the poll results were converted to seats the party would be doing a little better than it had at the last election, because, as the critics point out, that election was a catastrophe for Labour.

Inspired by the brutal rolling of Julia Gillard across the Tasman, and keenly aware that the procedure here for Labour to remove its leader is much more drawn out and cumbersome, some in the party are saying that Shearer must start to do better by spring or be replaced.

We know this because one or more Labour MPs has spoken to both the One News and 3 News political editors. In fact it looks like more than one MP according to Q+A:

JESSICA Some of the MPs that we’ve been talking to behind the scenes this week have said two months is-

DAVID Well, nobody’s spoken to me about it, and I can tell you, I’d like to know who the MP is.

Not a good look to have to ask a reporter who is briefing against you!

JESSICA Is it hard not having the support completely of your caucus?

DAVID Look, I have the support of my caucus. I mean, the fact that you’ve spoken to one anonymous person, and I haven’t heard of any-

JESSICA I’ve actually spoken to several people.

That should ring some alarm bells. However I think Shearer will remain safe, so long as the ABC faction thinks there is a chance Cunliffe could win a ballot in case of a vacancy.

“There is going to be me leading Labour into the election in 2014,” he said.

“I can absolutely and utterly assure you of that. It’s a very united caucus.”

Really? You look desperate when you say such nonsense. When Charles Chauvel departed in February he pleaded for an end to internal witchhunts, called for a purge of those responsible for the last campaign failure, and asked for those in the wrong faction to stop being shut out of the shadow Cabinet. How is that a united caucus?

This morning iPredict, the forecasting website owned by Victoria University of Wellington, pointed to a 40 per cent chance that Shearer would depart as Labour leader in 2013, with the possibility climbing in recent weeks.

I think Shearer has problems, but they are not yet terminal. In fact I have a bit of money on iPredict that he won’t be rolled in 2013. However I may change my position as events unfold in the next few weeks.

Labour leader David Shearer has been put on two months’ notice by his own MPs – if the poll ratings don’t improve, his leadership will be challenged.

A Labour MP told 3 News today that Mr Shearer had until spring – two months away – to pick up his and Labour’s performance.

The MP, speaking on condition of anonymity, said: “The caucus is just really flat. It’s not panic or anxiety just yet, but a couple more bad polls and it will be. David’s got a couple more months. A change in leadership cannot be ruled out before the end of the year.

Will Cunliffe do a Rudd?

The MP who spoke to 3 News is not a loyal supporter of leadership rival David Cunliffe. That makes the comments more significant as it shows there are broader concerns in the caucus about Mr Shearer’s performance

In response to the 6% drop in the Herald Digipoll, David Shearer has said:

‘We’re going to be doing exactly what we are doing now,”

This response was greeted with huge cheers from all National MPs. They hope Labour will carry on doing exactly what they are doing.

He fended off questions about what it would take for him to step down as leader.

Shearer can’t stand down. There is too much of a risk that David Cunliffe would win the battle to be his successor. This is as anathema to the ABC old guard faction as Kevin Rudd is to the ALP Caucus. It doesn’t mean they won’t stomach it eventually, but they are not desperate enough yet.

Is it time for Labour to rethink the unthinkable and think David Cunliffe? Probably not. At least not yet. Labour’s MPs would not be human, however, if they were not asking themselves – if not each other – the Cunliffe question after the latest Herald-DigiPoll survey. …

The poll is a horror story of Stephen King proportions for Labour. The party has dropped close to six percentage points since the last such survey in March to register just under 31 per cent support.

David Shearer’s rating as preferred Prime Minister has been slashed by a third and is back into “also ran” territory.

The survey uncannily resembles the result of the last election, leaving the observer to draw the obvious conclusion – that Labour has gone nowhere since.

Except David Shearer was quoted as saying that the long-term trend has been positive for Labour. So I graphed the results of the Herald Digipoll since the election.

Just as pundits are saying Australian Labor needs Kevin Rudd back, Toby Manhire is saying NZ Labour needs to promote David Cunliffe. He writes in the NZ Herald. First he looks at the Sky City issue:

For the decision by a quartet of Labour MPs to accept the invitation from SkyCity to enjoy their generous hospitality and a sweet view of the first France test was staggering in its myopia.

Then the bank account:

David Shearer’s admission in March that he had overlooked and failed to declare several thousand dollars in a New York bank account was a nightmare for Labour, skewering two of the attacks levelled at the prime minister: that his wealth distances him from normal people, and those forgetfulness issues.

And the recent debate:

On its own, the SkyCity box thing does not a Labour party crisis make. But it fits a pattern. The commanding effort by David Shearer at the party conference late last year increasingly looks like an anomaly. In his contribution to the urgent parliamentary debate on the Peter Dunne resignation the other day – a debate Shearer personally demanded – the Labour leader appeared to be reading from a script that had been torn up and sellotaped together at random.

There has been much chatter about Shearer’s performance in that debate. What makes it really bad is that this was a snap debate demanded by Shearer. It was almost as if he didn’t expect to get it and hadn’t prepared.

It’s true that Labour could end up leading a government if it continues in the current vein, but it would be one of hell of a shaky coalition, with the party outnumbered in Parliament by National by some distance.

They need a shake. An adrenaline shot. A risk, even. It’s now seven months since David Cunliffe was sent to the naughty step – expelled from the front bench for failing to squash talk of an insurrection.

Clearly he continues to be seen as a divisive figure, but he’s also shown, even from the backwater of the tax spokesmanship, that he remains a formidable politician. Confronted with National’s niggly, muscular front-row of Joyce, Brownlee and Collins, Labour can’t afford to leave Cunliffe in the shed.

But how about the ABCs?

As for the – ahem – optics, the promotion of an MP who had served his time would project strength, evidence of the leader’s vaunted experience in conciliation. To those MPs who continue to feel aggrieved on Cunliffe’s part it would send a message that the infighting must end.

A risk, yes. But a necessary one. Shearer’s elevation to and retention of the leadership has been enabled, so we’re told, by the weight of the Anyone-but-Cunliffe sentiment in the Labour caucus.

Less than 18 months out from the election, that ABC needs rethinking. Anything but carry on like this.

I would be surprised if Cunliffe was promoted to the front bench. His supporters are all being weeded out. Chauvel has gone. Dalziel is going. Mahuta has been demoted.

The real battle will be if Shearer loses in 2014. Then we see Cunliffe vs Robertson for the leadership. Cunliffe could win the membership vote by 2:1 so Robertson will need to win the caucus vote by at least 2:1 to balance that out (they get 40% each). Hence they will continue to try and weed pro-Cunliffe MPs out of caucus.

“I would have said, this is pretty unwise guys, given what we know,” Shearer said, adding that he believed the MPs had learned their lesson.

So Shearer is saying his office didn’t even know the MPs were attending?

But Shearer denied the situation undermined Labour’s arguments against the terms of the convention centre deal.

The invitation was “obviously a gift, on one level it is a perk of the job”, he said, adding that his MPs went to a large number of events which they would probably prefer not to.

Oh my God. Now he is arguing that the poor Labour MPs didn’t event want to attend. It was just their duty to go. How awful – getting to see an All Black test from a corporate box with free food and alcohol.

Shearer had gone into the box to speak to someone he knew was there, whom he declined to name. He would not explain how he knew the person was in the box.

He said he did not know his colleagues were being hosted by SkyCity until he got there.

So Shearer was popping into the box to see some one else? And no one had told him Labour MPs were there. I think Shearer is fundamentally an honest person so is telling the truth. But it says volumes about their internal communications.

Also Whale has audio from Radio Live where David Shearer says, well listen to it yourself and try and work it out.

A select committee hearing has descended into acrimony after Labour MP Trevor Mallard appeared to threaten the job of a senior police officer.

Mallard abruptly left a select committee after an exchange of angry words with Police Minister Anne Tolley after he questioned the decision of Deputy Police Commissioner Mike Bush to speak at the funeral of former police officer Bruce Hutton.

Is it newsworthy anymore when Trevor Mallard storms out of the House or a select committee? He’s done it so often, it is probably more newsworthy when he doesn’t.

After Mallard attempted to question Bush on the issue Government committee members objected that his questions were out of order.

But Mallard hit back and appeared to threaten Bush’s job.

“We’re deciding whether or not to continue his salary, that’s what we’re deciding now,” he said.

Really. A select committee can approve the salary of an individual police officer?

A number of Labour MPs were seen enjoying the hospitality of Sky City at Eden Park on Saturday night.

Rather amusing that they rant and rail about how Sky City destroys people lives through addictive pokie machines, and a deal with the Government to allow them some more. But then they are happy to take their hospitality, funded by the very same pokie machines.

Have to at least give the Greens credit for consistency.

Anyway here is my question, and I genuinely don’t know the answer. Was David Shearer one of those Labour MPs in the Sky City corporate box at Eden Park?

Surely no opposition leader would be so foolish as to lead a charge against Sky City’s pokie machines and deal with the Govt – and then turn up to their corporate box a few weeks later? Would they?

As I said, I know of at least two Labour MPs who were there. I don’t know if Shearer was there also. But I do hope someone asks.

However, critics seized on the state housing shakeup. Labour Party leader David Shearer said tenants would be “really worried”, as the Government was trying to push social housing on to private providers to save money.

What a stupid thing to say. The extension of income related rents to other social housing providers will not save the Government money – it will in fact cost them tens of millions of dollars as more low income families get subsidised rents.

The Opposition’s job is to oppose, but they should at least understand what they are talking about.

Labour leader David Shearer is headed for the United Kingdom and United States for a series of top-level political meetings, including helping lobby for a United Nations Security Council (UNSC) seat. …

A spokeswoman for Mr Shearer said he has no plans to close his US-based UN bank account – where his salary was paid for about 20 years while he worked for the organisation – while he is overseas.

Of course. You’d be mad to bring your money back now. You have Winston wanting to nationalise KiwiSaver funds, and Labour and Greens wanting to nationalise the energy industry – plus Greens planning to print money which means a huge devaluation for NZ.

Labour and the Greens have jumped the shark with a half-baked Soviet Union-style nationalisation “plan” for electricity in New Zealand, Economic Development Minister Steven Joyce says.

“This is truly wacky and desperate stuff obviously made up in the last minute in the Koru Lounge between comrades Norman and Shearer,” Mr Joyce says.

“Their crazy idea to have both a single national purchaser of electricity and to exempt Government-owned companies from both company tax and dividends would effectively demolish private investment in the electricity industry overnight. It would also raise real questions as to why any individual or company would want to invest in businesses in New Zealand.

I never thought we’d see parties in NZ advocating socialist nationalisation policies from decades ago. Stuck in a time warp.

Minister Joyce’s release on the Greens and Labour’s electricity announcement is full of basic inaccuracies: he says that NZ Power would exempt electricity companies from corporate tax and dividends, which is completely false and not backed by anything in the discussion document.

Radicals both right and left are sensing that France’s political tide is rising in their favour, driven by a President plumbing record unpopularity less than a year after taking office.

Francois Hollande, a Socialist already under fire for economic mismanagement, is bogged down in a scandal unleashed by his Budget Minister, Jerome Cahuzac.

Svelte and smooth-tongued, Cahuzac had been leading Hollande’s campaign to fill the state’s coffers by raising taxes, urging citizens to pay their fiscal dues as “solidarity” towards others.

Last week, Cahuzac quit after admitting he had had a secret bank account in Switzerland for decades.

David Shearer is lucky he remembered about his foreign bank account while he was Opposition Leader. Imagine the impact if he been a Minister or Prime Minister and it emerged.

Hollande romped to the presidency on May 6 on campaign promises to govern France competently, fairly and cleanly. He declared he would roll back unemployment, meet the EU’s targets on borrowing and, after decades of scandals embroiling both left and right, give France an “exemplary” government.

Today, his approval rating stands at only 27 per cent, the lowest of any president in modern French history at such an early point in his tenure.

Unemployment has risen like an express lift, affecting 3.188 million people, or nearly one in nine of the workforce – a tad short of a record set in 1997.

The budget deficit is 4.8 per cent of GDP, compared to Hollande’s pledge, since abandoned, to meet the EU’s limit of 3 per cent last year.

Public debt rose in 2012 to an astronomical 90.2 per cent of GDP, compared with 85.8 per cent in 2011 – and Hollande’s own target of 89.9 per cent.

Socialism doesn’t work. He’s hiked taxes and spending, and I think Labour’s housing plan is based on his pledge to build 500,000 homes a year.

To get some idea of how unpopular he has become, Reuters reports that National Front Leader Marine Len Pen has a higher approval rating than Hollande.

People may be interested in this transcript from Q+A. The video at the link is even better:

SUSAN WOOD

On Friday we found out some of the details about the partial sale of Mighty River Power. The price range for the shares estimated to be between $2.35 and $2.80. That should bring around $2 billion into the government coffers.

Good morning, David Shearer.

DAVID SHEARER,

Good morning, Susan.

SUSAN $2 billion on schools, on things that are public good. Money well spent?

DAVID No, because you also miss out on the revenue over a longer period than that, and as soon as you do that, 50 per cent of your revenue goes, and over time, obviously, that’s nonsensical. But the other thing about selling these shares is that a small group are going to get ownership of those shares-

SUSAN 400,000 people is not a small group of New Zealanders.

DAVID Well, if you actually add it up, it’s going to be well less than 10%. More than 90% of New Zealanders will not have the opportunity to buy shares, and they will lose, in a sense, what they already owned before, which is a national asset.

SUSAN So without selling assets, and we know you don’t want to, how will you balance the books without borrowing?

DAVID Well, what we had been saying before is a whole programme of economic development, capital gains tax, and in the short term-

SUSAN So tell me how you’ll raise $2 billion. This government’s raising $2 billion doing it. How will you come up with $2 billion?

DAVID Let’s start from the beginning, then. Do we need to have exactly that $2 billion or not? The way the government’s put its books in order, or not in order, is by putting forward an argument that we need to sell our state-owned assets. I don’t believe that that’s the way that we should be going forward. There are other alternatives.

SUSAN Do you agree, though, that the government should be running a surplus? They should not be in deficit? Households have to tidy up their act. Do you agree that the government books should be in surplus?

DAVID Well, of course we should be in surplus, and that’s what the Labour government did for nine years while it was in government, and that’s what it handed on to the National government – government books that were in surplus.

SUSAN Yeah, but to be fair, there’s been a GFC.

DAVID When you sell a state-owned asset like Mighty River Power you forego the income that that brings in.

SUSAN I understand that.

DAVID So what you’re effectively doing- It’s like selling your business, putting an extension on your house – you feel much better for that, but you lose the income from the sale.

SUSAN OK, but they are getting the books back into surplus. They are getting their house in order. Give me a few ideas of how Labour would get the house in order without borrowing more money.

DAVID Well, at the moment we don’t have a growth agenda in New Zealand. We are not growing our economy as we should.

SUSAN But give me some specifics here of what you would do. We know what this government is doing. How would you raise a couple of billion to get the books back in balance?

DAVID Well, what I’m saying is that what we need to do is to grow the economy in a way that it’s not growing at the moment, and we’ll be talking about Tiwai Point in a little while…one of the big problems about – no, no, let me finish – one of the biggest problems about that is that the exchange rate is so low that we’re seeing many of our businesses actually going out of business because they’re not being able to succeed. We’re not putting our money in the profitable sector; it’s going into the property market because we don’t have a capital gains tax that will help us direct money into those areas. And if you’re wanting to raise money, then at least put money into businesses- invest in businesses through the incentives of capital gains, and that brings, obviously, money into the government as well.

SUSAN Let’s talk about the GCSB spy boss, Ian Fletcher. Is he the right man for the job?

DAVID I don’t know Ian Fletcher, but I can say that the way he has been appointed-

SUSAN No, no, there is nothing negative about him, is there? There is no suggestion that he is not the right man for the job. Let me phrase it that way.

DAVID Well, let’s put it another way. Just last year, when the whole Dotcom issue was running, Ian Fletcher was the person who went to the prime minister and said, ‘Sign this, because I want to cover up the fact that we’ve been illegally spying on Dotcom.’ That was the ministerial certificate that Ian Fletcher took to the prime minister. Now, I don’t think that was a good move. I don’t have an opinion of him per se, but-

SUSAN Well, you don’t like that.

DAVID Of course I don’t. No, I’ve just said that. But what I don’t like is the way that he was interviewed and the process that went through. I don’t like the idea-

SUSAN But hang on-

DAVID Hang on, no, no, just let me finish- John Key has shoulder-tapped one person, put him into that position. We now have in our most secret agency in New Zealand a friend of John Key’s who reports directly to him. John Key is the only person who has democratic oversight over that agency.

SUSAN And it’s his right. It is his right to select whoever he wants for that job.

DAVID There is a real problem in New Zealand now with the confidence that we have in our intelligence agencies, and if I was coming into office, I would have a full independent inquiry into our intelligence agencies to restore that confidence, because if we don’t do that we will not be able to hold ourselves up as the transparent nation that we are.

SUSAN Rebecca Kitteridge has been looking into it.

DAVID That’s an internal report. I would want this to have a terms of reference that would be agreed by parliament. It would report back to parliament so that we all have confidence in it. It’s something the Australians did a few years ago when there was a crisis in their intelligence agencies, and they’ve had regular independent outside reviews going on. Now, we have the SIS at the moment. The SIS is about to look at its legislation, reform its legislation, and I think that we need to have that independent review before we get to that point.

SUSAN Much made this week of the Prime Minister’s memory loss. You, of course, have had your own memory loss over that $50,000 US or more, how much was it?

DAVID I’m not going to say. It’s my family business. I don’t talk about my savings online, but I do-

SUSAN Tony Ryall said in the house it was a couple of hundred thousand dollars US. Is that correct, or is it more than that?

DAVID I’m not going to say. It’s my family business.

SUSAN Didn’t you lose your right for privacy around it when you forgot to declare it? When you broke the rules and did not declare it?

DAVID No, I absolutely did not. I said that I made an error. I myself came forward and corrected that error. I took it on the chin and said ‘here it is’. And I expect that to be the standard by which all politicians operate if they do make a mistake.

SUSAN That’s what John Key did this week. He said he’d made a mistake and he fessed up. Exactly the same scenario.

DAVID I think what John Key was doing this week-

SUSAN He came forward.

DAVID No-

SUSAN Yes, he did. He came forward and he said, ‘Actually, I’ve checked by records and I did call Ian Fletcher.’ He came forward.

DAVID What he was doing this week was that he was deliberately trying to move opinion away from and deflect opinion away from his friendship and relationship with Fletcher.

SUSAN Is your problem with this money- Is your problem with this more than $50,000 US in the bank, is your problem that there is so much money there that it would not resonate? You would not resonate? I mean, Michael Cullen very famously called John Key a ‘rich prick’. Are you, Mr Shearer, a rich prick?

DAVID Look, I worked for my money working for the United Nations in Iraq. I put it in the bank. It’s my family’s savings. I didn’t put it on my pecuniary interest. I declared that and I came forward and I was honest about it.

SUSAN And you were very well paid in that job, sometimes up to half a million Kiwi dollars a year.

DAVID No, I think you need to do your research on that, quite frankly, Susan. But, look, working in Iraq, where we lost 25 people, there was a- people do get paid hazard money in those situations.

SUSAN What’s the money sitting there for?

DAVID Look, it’s my family- Look, people put money in the bank for any- Look, this is my private savings, my family’s savings. Do you ask John Key what he does with $50 million when he comes on to your show?

SUSAN John Key actually does have scrutiny over his money all the time. There are reports about how much money he has; he’s on the NBR Rich List – all those sorts of things. So, yes, he does have the same sort of scrutiny.

DAVID Well, I haven’t heard you asking the same sorts of questions-

SUSAN I haven’t had him on the programme yet, but when I do, I will ask him. So, are reports that it’s around $1 million correct or incorrect?

DAVID Look, I am not going to put a figure on it, and I resent the fact that you are asking me to reveal how much is in my bank account. Nobody needs to do that. I have done-

SUSAN You do need to.

DAVID I have done what I was obliged to do under parliamentary rules, which is to declare any account that had more than $50,000 in it. I did do that. I regret, obviously, not putting that on my pecuniary interests, and that’s where it stops.

SUSAN So you’re not a rich prick?

DAVID I’m- Obviously, as a New Zealander, I’m fortunate, but I’m not in the same league as our prime minster, no.

SUSAN Tiwai Point – what would you do if you were in government?

DAVID Oh, look, Tiwai Point needs to be negotiated. It obviously needs the government to have a look and see what it can do.

SUSAN What would you offer, though? Would you be offering Rio Tinto some sort of extra funding to stay here?

DAVID Oh, look, I think what we would need to do is take a look at what’s on the table, and I don’t know what’s on the table.

SUSAN Nothing’s on the table. The government’s pulled it off the table, haven’t they?

DAVID We don’t know how far apart they are. We’ve only just got indications about that. I think what we need to do, though, is look at the national interests about what this means to New Zealand, what it means to Southland, what it means to jobs. And at the moment the government is not in the business of creating jobs. There are jobs going and for Southlanders obviously they are very, very -

SUSAN I think you could actually say that the government has played Rio Tinto pretty well on this. And the numbers – let’s talk about them. $250 million a year they pay for power. That’s about a quarter of what you pay for power, of what all of our viewers pay for power. They pay one quarter. They then return about $150 million. Effectively, we’re giving them a $750 million discount. Should they even be here? I mean, what are they really adding?

DAVID Well, that was what they were set up for, obviously, and they were guaranteed that power for a long time. I mean, you have to play out what does it mean for jobs, what does it mean for the Southland economy, what does it mean for our current account deficit? But the bottom line is you would try to, obviously, secure a deal-

SUSAN Really? Because those numbers I’m looking at there, there are other things you could do. The power could be in other uses.

DAVID But you wouldn’t be going into a negotiation with a blank chequebook.

SUSAN And the government hasn’t. They’ve walked away.

DAVID Well, the government, what it did, was it was trying to-

SUSAN The government put pressure on Rio Tinto.

DAVID What the government was trying to do was actually get the sale of Mighty River Power across the line and reduce the uncertainty around the electricity price. That’s what it was trying to do, and that’s why it went into negotiations. Now, it went into negotiations with Rio Tinto aware that the government was wanting to do that. So it went in with one hand tied behind its back.

SUSAN Well, they haven’t paid it one cent, which I think would be the public mood at the moment – no mood to give a lot of money to a foreign multi-national. One final question – there is some confusion around Labour, and I’ve been trying to press you during this interview about what you would do differently. So let me give you a specific example. You’re a 26-year-old woman. You’re living in Auckland. You’re earning $65,000 a year. You’re paying off your student loan. You’re renting. What would Labour do for this woman that National is not doing?

DAVID Well, two things – first of all, we would have a healthy home guarantee to make sure that where she’s living, in the rental accommodation that she’s living in, is actually up to scratch; it’s both heated and it’s insulated. The second thing that we would do is we’re building 10,000 houses, affordable homes, a year, and that would enable her to have an opportunity to get on to the housing ladder. So there are two specific things that I believe that would help that case.

SUSAN Thank you for your time this morning.

DAVID Thanks, Susan.

I like how Labour goes from condemning the Government for negotiating with Rio Tinto on Tiwai Point, to complaining they didn’t secure a deal.

Shearer was trying to pierce the Key Government’s defence that the EQC privacy leak was down to “human error”. Putting it down to a human error wasn’t good enough, according to Shearer.

It was a tactic doomed for failure from the get-go.

Because Shearer himself was just a week before defending “forgetting” to declare a figure that could be anything north of US$50,000 – possibly even US$1 million – in the MPs Register Of Pecuniary Interest.

I have never before seen Key given such an easy hit in the Parliament.

Shearer himself took to his feet and actually uttered the words I was thinking: “This is unbelievable” – although we were both thinking of it for different reasons.

So Key smashed Shearer not once, not twice, but five times from what I saw.

Key’s line was that the EQC worker made a mistake – just like the mistake Shearer claims he made. Over and over and over again.

Was it “human error” that led Shearer to think he could attack Key over “human error”?

This is the real significant of the error in not disclosing the foreign bank account for four years. It negates the ability of the Labour Party Leader to attack the Government over lesser errors.

And highlighting Government errors is a major part of what being in Opposition is about.

Part of the problem for Shearer is that there has been no real explanation of the error. If the explanation was he was aware of the bank account but didn’t realise he had to disclose it – then that would be understandable.

But it seems to be merely that he forgot he had the bank account, despite including it in his tax returns every year.